Turnover at one mature organization I have spoken with recently has reached close to 100% for its key engineering talent. This is not because the company is a poor performer or because it doesn’t pay well. In fact, it is doing very well and pays above the average.
The reason they are losing people is because they are well-paid, have made significant income, and have built up large 401(k) accounts. They are leaving because they are successful and able to pursue other interests.
The causes of turnover are changing and wise organizations are looking deeply at those causes and learning new ways to respond.
I often hear managers, CEOs, and supervisors promising this and that and making speeches about how committed they are to their workers.
When it comes time to allow workers some say in their work, or the opportunity to transfer to another department, or the chance to try something new, they just as often hesitate. Words can take on many meanings and can be twisted to fit any occasion. Deeds speak for themselves.
Back in the “good old days,” turnover levels were very low in most organizations, often approaching less than 2% in firms such as Hewlett-Packard and IBM. Employees expected to be retained until retirement and to receive a living retirement income after 25 or 30 years of service. There was loyalty and commitment to the firm and frequently in the best of these companies, strong cultures matured. These cultures provided an unwritten behavioral guide and a sense of pride and friendship. People were proud to be knows as an IBMer, for example, because it was like being admitted to an exclusive club. Their friends who were not IBMers were jealous.
But somewhere in the early 1980s, things began to change. The first crack came with the advent of the 401(k) and (b) plans that freed employees from the corporate retirement programs. The 401 programs are, in effect, portable pensions. In effect, you take your accumulated savings and add to them somewhere else.
Silicon Valley companies had never set up pension programs because the young companies there, with young non-union workers, did not feel any need to establish retirement programs. So they were the first to feel the impact of 401 programs as workers started understanding what they were all about.
Later the downsizing and re-engineering movements began reducing the workforce and began to crack the idea that a company would take care of you until you were ready to retire. Thousands found themselves on the street with no jobs and no retirement benefits. Loyalty crumbled and the idea of staying with an employer for decades became less attractive.
In fact, for many young people the idea of working for a single employer for some long period of time is frightening and is seen as career limiting. How times change!
Now as we enter a couple of decades where it will be very hard to find good people and even harder to keep them, we have corporations interested in preventing both their baby boomer experts and their newly recruited Gen Y superstars from leaving. It is tough to convince them to stay.
Most organizations find themselves with benefits packages that are increasingly the same: portable pension plans, good cafeterias, and lots of other perks. Nothing really differentiates them in material aspects from the competition.
From an employee’s perspective, there is almost no negative stigma to having frequently changed jobs. In fact, changes that make sense are considered a plus as they mean the employee has added experience and competitive knowledge.
So how do you make it more attractive to keep employees? Here are a few ideas:
These are the best ways to reduce turnover and develop a workforce that is energized and productive. It requires a committed management team and a lot of new thinking, but these methods can really work.
